Canara Bank is Rated Buy by MarketsMOJO

Current Rating and Its Significance

On 03 September 2025, Canara Bank's rating was revised to 'Buy' from 'Hold' by MarketsMOJO, reflecting a significant improvement in its overall Mojo Score, which rose by 14 points from 64 to 78. This rating indicates a positive outlook on the stock, suggesting that investors may consider adding or holding the stock in their portfolios based on its current strengths across multiple parameters.

Here's How Canara Bank Looks Today

As of 28 December 2025, Canara Bank demonstrates robust financial health and market performance. The stock has delivered a year-to-date return of 49.78% and a one-year return of 48.51%, signalling strong investor confidence and market momentum. Over the past six months, the stock has appreciated by 35.01%, while the three-month return stands at 27.01%, underscoring sustained upward movement.

Quality Assessment

Canara Bank's quality grade is classified as 'good', supported by its prudent lending practices and asset quality. The bank maintains a low Gross Non-Performing Assets (NPA) ratio of 2.35%, which is a key indicator of asset quality and risk management. This low NPA ratio suggests that the bank has effectively managed credit risk, which is crucial for sustaining profitability and capital adequacy.

Valuation Perspective

The valuation grade for Canara Bank is deemed 'attractive'. The stock trades at a Price to Book (P/B) ratio of 1.3, which is reasonable compared to its peers and historical averages. Additionally, the Return on Assets (ROA) stands at 1.1%, reflecting efficient utilisation of assets to generate profits. The Price/Earnings to Growth (PEG) ratio is notably low at 0.3, indicating that the stock is undervalued relative to its earnings growth potential, making it appealing for value-conscious investors.

Financial Trend and Profitability

The financial grade is rated 'positive', reflecting strong growth trends and consistent profitability. Canara Bank has exhibited a remarkable compound annual growth rate (CAGR) of 61.43% in net profits, highlighting its ability to expand earnings over the long term. The latest operating cash flow for the year is at a peak of ₹59,946.57 crores, demonstrating healthy cash generation capabilities. Furthermore, the bank has declared positive results for three consecutive quarters, reinforcing its stable earnings trajectory.

Technical Outlook

From a technical standpoint, Canara Bank is graded as 'bullish'. The stock's recent price action shows steady gains, with a modest 0.20% increase on the latest trading day. The upward momentum over the past three and six months supports the bullish sentiment, suggesting that the stock is well-positioned for further appreciation in the near term.

Investor Implications of the 'Buy' Rating

The 'Buy' rating assigned by MarketsMOJO indicates that Canara Bank currently offers a favourable risk-reward profile. Investors should interpret this as a recommendation to consider accumulating or holding the stock, given its strong fundamentals, attractive valuation, positive financial trends, and supportive technical indicators. The rating reflects confidence in the bank's ability to sustain growth and deliver shareholder value over time.

Market Capitalisation and Sector Context

Canara Bank is classified as a midcap stock within the Public Sector Bank sector. Its market capitalisation and sector positioning provide a balance between growth potential and stability, making it an appealing option for investors seeking exposure to the banking industry with a focus on quality and value.

Summary for Investors

In summary, Canara Bank's current 'Buy' rating is supported by a combination of strong asset quality, attractive valuation metrics, positive financial trends, and a bullish technical outlook. The bank's ability to maintain low NPAs, generate robust profits, and sustain cash flows positions it well for continued growth. Investors looking for exposure to the public sector banking space with a focus on quality and value may find Canara Bank a compelling addition to their portfolios.

Key Metrics at a Glance (As of 28 December 2025)

• Mojo Score: 78.0 (Buy Grade)


• Gross NPA Ratio: 2.35%


• Net Profit CAGR: 61.43%


• Operating Cash Flow (Yearly): ₹59,946.57 crores


• Dividend Per Share (Yearly): ₹4.00


• Price to Book Value: 1.3


• Return on Assets (ROA): 1.1%


• PEG Ratio: 0.3


• Stock Returns: 1D +0.20%, 1W +0.98%, 1M -0.13%, 3M +27.01%, 6M +35.01%, YTD +49.78%, 1Y +48.51%

These figures collectively illustrate the bank's strong position in the current market environment and justify the 'Buy' recommendation for investors seeking growth with a reasonable margin of safety.

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